A bump in the road, or sky, for American Airlines

American Airlines officially declared bankruptcy earlier today to cut costs and restructure their financial identity. The company reports having problems with high labor costs and raising gas prices. Luckily, the 18-month timeline allotted for restructuring the airline’s business plan will likely result in a profitable future, according to many financial experts.

"AMR will no longer have its defined benefit pension plan, helping absorb nearly $7 billion in debt," Morningstar equity analyst Basili Alukos said.

"I imagine the company can save between $1.2 billion to $1.5 billion in labor costs, in addition to savings on repair and maintenance and better fuel burn," he said.

While American Airline’s finances may survive this bankruptcy, we must consider who else will suffer.  Retirees, employees, customers, and investors will all be affected. And we must not forget our dear friends at Interpublic Group of Cos.’ FutureBrand who have been planning an entire brand revamp strategy.

I think it’s safe to say that FutureBrand will have to press the brake on their rebranding campaign while Weber Shandwick, American Airline’s public relations agency, will be pouring blood, sweat and tears into a crisis management campaign.

https://www.facebook.com/aa

Weber Shandwick has already responded with posting information about the bankruptcy announcement including a video from Tom Horton, chairman, president, and CEO of AMR Corp.

Now that American Airlines has dived into financial hell I wish them the best and will be looking out for super cheap flights in the future!

Why Go Green?

I recently began participating in the “go-green” revolution.  No, it wasn’t the “Save the Earth” or “Respect our Planet” messages nor was it the recent literature on environmental changes that transformed my habits. Nope, what did me in was vanity.

Studies show that people who live a “green” lifestyle are healthier, happier, and well…skinnier. Now as a girl, the “skinny” message hit home with me and I decided to change my habits.

While my vanity led me to adopt a new lifestyle, what other incentives drive consumers to adopt the “green” lifestyle? I began perusing the internet to find out and while it took some digging, here’s what I found:

In summary of articles I have read, consumers are particularly receptive to learning about environmental initiatives if it saves them money. Utility and home improvement companies are in a great position to ride on the go-green movement by presenting that they have environmental waste-reduction services that are cost effective.

Ha! I should have known…it’s always about the money!

http://greenlifestylemagazine.net/images/issue-4/money-recycling.jpg

Netflix Blunder Update

Netflix shares hit their all-time-low this year on Wednesday, leaving CEO Reed Hastings with a little less to be thankful for.

http://articles.businessinsider.com/2010-07-21/tech/30041565_1_netflix-nflx-subscriber

The company has been suffering since its announcement of the controversial price hike this summer and later attempt to separate the DVD rental service. Since these heavily resisted business moves, Netflix has lost 800,000 subscribers in the third quarter alone.

So now what does Netflix do? Financially they have planned to sell $200 million in common stock and $200 million in bonds to raise cash to expand into U.K. and Ireland and guarantee more content deals. But what about communication-wise? How does Netflix use communication to reverse the company profits?

For one, Netflix can start being a lot more transparent in their business methods. The DVD/online streaming split announcement back in September nearly destroyed the company’s image. To make up for lost ground, Netflix should try to create content to drive consumer engagement. This would show Netflix is listening to their consumers and has learned from their mistake.

Longhorn Network: Flop or Fortune?

The Longhorn Network launched August 26 to a sea of expectant fans. But here we are, three months later, and chances are that very few of those fans actually have access to the channel.

Predictions project that barely over 4 million cable customerse have access to LHN. The primary national cable carrier is Verizon FiOS. Regionally, Grande broadcasts LHN to 180,000 viewers in cities across Texas.

 “We've attempted to do similar deals with Time Warner Cable, DirecTV, AT&T U-Verse, Dish and Comcast,” ESPN said in October. “Unfortunately, these operators have not engaged in active negotiations in the past month.

The LHN/ESPN partnership creates an complementary brand. “No matter how ESPN spins it, the Longhorn Network is a P.R. arm of Texas,” wrote Richard Deitsch, a media columnist for SI.com.

While the initial partnership seemed to launch UT Austin further into collegiate stardom, what are the repercussions for the lack of coverage? How does this affect the university’s brand reputation?

In my opinion, the potential flop of the Longhorn Network definitely weakens the University of Texas brand image. People will criticize the amount of hype and coverage Longhorns expected to receive and failed to get and rank this attempt as a loss. Lord knows the Longhorns have enough enemies to crank that rumor mill.

Please feel free to share your thoughts.

Newspaper Survival 101

In an attempt to survive among the growing digital world, newspapers are now responding with a type of Groupon coupon chain. Eight publishing and media companies are launching Find n Save, a digital shopping platform that will spread across the companies 200-plus newspapers.

http://valerioveo.com/wp-content/uploads/2009/08/tough-times-newspaper.jpg

Christopher Tippie, the acting CEO of the group, says “it’s an industry movement to embrace a single advertising platform. We’ve got to come together and bring forth a better set of advertising tools to connect with shoppers.”

From what I can tell, Find n Save is a type of “one-stop-shop” for online shopping deals. For example, McClatchy, a newspaper parent company has been using the Find n Save online deals in an array of online products including coupons, daily deals, and circulars. The newspaper has also included a social element by embedding real-time local deal feeds from shopping blogs and Twitter.

I think it is extremely wise for newspapers to adopt the Find n Save program in order combat their decline. I believe a print newspaper will lessen risk of extinction by undergoing a continuous media and technology evolution. As long as newspapers continue to adapt their editorial product to the web, they should survive.

Dearly broadcasted beloved...

I stumbled upon an advertising campaign that truly won my heart… and my attention.

Robbins Brothers, a jeweler in California, is running an interactive digital OOH campaign for the holidays. Consumers are prompted to type a love note to someone on Robbins Brothers’ Facebook page to be uploaded to a digital billboard on the 91 freeway in Riverside, Calif. Then they will take a photo of it and send it to you to pass on.

http://www.adweek.com/adfreak/jeweler-immortalizes-your-sappy-facebook-notes-billboard-136592

This is an extraordinarily clever way to merge social media, out-of-home, and interactive platforms. Advertisers have been sweating these past years over the transition from traditional media and here is an excellent breakthrough from that.

Robbins Brothers’ media plan schedule is also worthy of praise. The holiday season is traditionally the highest jewelry-buying season and this year is no exception. According to IBM’s forecast, jewelry sales are projected to rise 7.7 percent from 2010 sales in November and rise 4 percent from 2010 sales in December.

It looks like with the just a little help from Robbins Brothers, many lucky gift-receivers will be realizing this winter really is the most wonderful time of the year.

AdWeek’s explanation of the campaign can be found on the link below.

http://www.adweek.com/adfreak/jeweler-immortalizes-your-sappy-facebook-notes-billboard-136592

American Apparel thankful for short-term memory

Advertisers often complain and complain about the forgetfulness of consumers.  They hang their heads when a consumer’s recall is low and shake their heads “why.” But perhaps we should be happy consumers sometimes forget us.  Take American Apparel for example.

In September 2011, American Apparel racked their most recent offense in a slew of controversial advertising efforts. American Apparel launched “The Next Big Thing” plus-size modeling contest in anticipation for their plus-size merchandise launch. 

The contest copy said, "Calling curvy ladies everywhere! Our best-selling Disco Pant (and around 10 other sexy styles) are now available in size XL, for those of us who need a little extra wiggle room where it counts.  We’re looking for fresh faces (and curvaceous bods) to fill these babies out. If you think you’ve got what it takes to be the next XLent model, send us photos of you and your junk to back it up... We’ll select a winner to be flown out to our Los Angeles headquarters to star in your own bootylicious photoshoot." 

Interpret the language as you will, but for many consumers American Apparel crossed the line. In fact, for one consumer, Nancy Upton, the contest pushed the wrong button just enough for her to push right back.

Upton entered the contest as a joke and sent photos of her bathing in ranch dressing, eating fried chicken in a pool, and scarfing down a cherry pie. Her intentions were to call the company out on their offensive language and weak attempt at befriending the plus-size community.

Shannon Skloss Photography: www.shannonsklossphotoghraphy.com

The controversy received national attention when voters chose Upton as the winter of “The Next Big Thing” contest. American Apparel’s creative director Iris Alonzo responded aggressively and abusively by removing Upton as the winner. Further debate was fired on online blogs, newspaper articles, and on television spots such as NBC’s “Today Show.”

No media posts have been made since September regarding this controversy. While reputation may be hard to measure since the plus-size controversy, financial measures can account for the effect the controversy has had on the company. Stock in September was relatively low but spiked dramatically in early November to 1.90.  Net sales also improved $8,085,000 from the end of June to the end of September. . American Apparel may have just slipped by with a few bumps and bruises on this one and should continue to be thankful for the short-term memory of many consumers. Only time will tell.